Did I misunderstand, or is Giant Cape just a better potion/Blue 95% of the time?

Compared to potion, it can do everything it can, and be used to preemptively "heal" an important mon. You just can't Cape the same mon twice, but any deck that plays potions should immediately replace one with a cape.

Compared to Blue, it's not a trainer and gives +20 instead of +10. The only scenario it's worse at is defending against spread damage (Spiritomb, Articuno) or against Sabrinas/Cyrus switching out your mon. But Blue is usually used to protect a specific Pokemon anyway, so it's moot.

Having both these functions, in an item, makes the tool kinda cracked?